M&C Saatchi drops Australia, New Zealand sale after talks fail (updated)

M&C Saatchi

22/09/2026 07:25

M&C Saatchi treats Australia, New Zealand operations as discontinued 
Analysts cut full-year operating profit estimates 
Like-for-like net revenue falls 1.4% in six months to June 30
Rewrites with Australia and New Zealand business details and context, analysts comments, shares
Sept 22 (Reuters) - British advertising group M&C Saatchi SAA.L said on Tuesday it had abandoned plans to sell its Australia and New Zealand business to local managers after the parties failed to agree terms.     
Shares in the London-based company, which has been simplifying its operations amid tough market conditions, were down 6.8% to 137 pence at 0910 GMT.
Advertising groups have been hit by weak business confidence, event cancellations and delayed projects since the start of the Iran conflict. Technology giants have also diverted marketing budgets to AI infrastructure.
The failed deal adds to pressure on M&C Saatchi's margins.
"The local team is in discussions with clients regarding ongoing work and, where appropriate, the potential to transition work to another part of the wider group," the company said.
Its Asia-Pacific business, which generated nearly 18% of 2025 revenue, is dominated by its Australia operations. M&C Saatchi had signed a non-binding term sheet to sell the Australia business for A$1 because of its low margin contribution.    
Analysts have cut forecasts for annual profit and revenue after the Australian business was classified as a discontinued operation and because of headwinds in the Middle East.
M&C Saatchi, however, said it saw signs of improving momentum in the second quarter with like-for-like revenue returning to modest growth, driven in part by its non-advertising services for public sector clients.
"Year-to-date has been encouraging despite disruption in Australia/New Zealand and the UAE," said Peel Hunt analyst Jessica Pok. "We believe new business wins should support a robust second half."
     Like-for-like net revenue declined 1.4% in the six months to June 30. 
($1 = 0.7479 pounds)

 (Reporting by Prerna Bedi in Bengaluru; Editing by Subhranshu Sahu and Mark Potter)
 ((Prerna.Bedi@thomsonreuters.com; +91 98052 24616;))